The DOI matches its Crossref record; 3 of the 3 references it cites were found in a registry or an index.
Explaining the Premiums Paid for Large Acquisitions: Evidence of CEO Hubris
Abstract
This study examines the role of a chief executive officer's hubris, or exaggerated self-confidence, in explaining the large size of some premiums paid for acquisitions. In a sample of 106 large acquisitions, we found that four indicators of CEO hubris are highly associated with the size of premiums paid: the acquiring company's recent performance, recent media praise for the CEO, a measure of the CEO's self-importance, and a composite factor of these three variables. The relationship between CEO hubris and premiums is further strengthened when board vigilance is lacking-when the board has a high proportion of inside directors and when the CEO is also the board chair. On average, we found losses in acquiring firms' shareholder wealth following an acquisition, and the greater the CEO hubris and acquisition premiums, the greater the shareholder losses. Thus, CEO hubris has substantial practical consequences, in addition to having potentially great theoretical significance to observers of strategic behavior.
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A theory of social comparison processes
Festinger, L. (1954) · Human Relations · doi:10.1177/001872675400700202 · Cited by 20,926
Power in Top Management Teams: Dimensions, Measurement, and Validation
Finkelstein, S. (1992) · Academy of Management Journal · doi:10.5465/256485 · Cited by 2,389
Schweiger, D. M., Sandberg, W. R., & Ragan, J. W. (1986) · Academy of Management Journal · doi:10.2307/255859 · Cited by 682
Cited by
Who makes acquisitions? CEO overconfidence and the market's reaction☆
MALMENDIER, U., & TATE, G. (2008) · Journal of Financial Economics · doi:10.1016/j.jfineco.2007.07.002 · Cited by 2,754
Chatterjee, A., & Hambrick, D. C. (2007) · Administrative Science Quarterly · doi:10.2189/asqu.52.3.351 · Cited by 2,074
Self-citationFlawed Self-Assessment: Implications for Health, Education, and the Workplace
Dunning, D., Heath, C., & Suls, J. M. (2004) · Psychological Science in the Public Interest · doi:10.1111/j.1529-1006.2004.00018.x · Cited by 1,865
Meta‐analyses of post‐acquisition performance: indications of unidentified moderators
King, D. R., Dalton, D. R., Daily, C. M., & Covin, J. G. (2004) · Strategic Management Journal · doi:10.1002/smj.371 · Cited by 1,363
The toxic triangle: destructive leaders, susceptible followers, and conducive environments.
Padilla, A., Hogan, R., & Kaiser, R. B. (2007) · The Leadership Quarterly · doi:10.1016/j.leaqua.2007.03.001 · Cited by 1,188
Metadata
- Authors
- Hayward, M. L. A., & Hambrick, D. C.
- Venue
- Administrative Science Quarterly
- Publisher
- JSTOR
- Published
- 1997-03
- Volume
- 42
- Issue
- 1
- Pages
- 103
- ISSN
- 0001-8392 (ISSN-L)
- OpenAlex
- W1967053015
- Cited by
- 1,787
- References
- 3
- FWCI
- 18.81
- Type
- journal article
- Language
- en
- Open access
- closed
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